BERLIN — Internet World 2000 followed its successful debut in Los Angeles this spring with an encore in European capitals from London to Berlin. Breaking attendance and sales records, these exhibitions set the stage for more than a dozen conferences on international e-business, bringing many start-ups closer to their vision of becoming global online enterprises. Exhibitors and attendees agreed that a global presence is becoming essential for e-business growth, at the same time that new services are making this easier and more affordable.

While the United States continues to lead Internet usage and e-business, two-thirds of all new Internet subscribers now come from outside the United States. Western Europe alone had 43 million Internet subscribers at the end of 1999, a figure the European International Telecommunications Organization predicts will double in three years.

Getting Started

Exhibitions such as Internet World offer a good opportunity to create an international presence for a modest investment. A small booth at an international show such as Amsterdam or Berlin starts at $3,000 for three days. Economy air plus hotel packages from California are available for under $1,000 per person. A professional-looking exhibit can cost more than $10,000 to construct and transport, but need not be too expensive. Online advertising agency DoubleClick, for example, uses inflatable plastic tubes and color computer terminals for a lightweight, portable exhibit which stands out at any show.

In addition to Internet World, many international conferences and exhibits generate opportunities for Internet start-ups. Global Technology Business of Mountain View is organizing "Start-Tech Conferences" for early stage e-businesses to meet prospective clients and distributors in London and Munich this autumn, as well as e-business exhibitions for companies of all sizes in Israel and the Czech Republic. Alex Vieux, Global Technology Business' CEO says. "You need to be in the top 5 percent of global e-business to make it. Otherwise, you'll be sold, be acquired or go out of business."

Global success is a challenge even for the largest firms. Gregory Gordon, director of Microsoft's Consumer Group, told e-business executives at Andersen Consulting's Global Telecommunications Conference in Berlin, "The deeper you get, the more difficult it is to adapt Web site and business models to international markets." Rob Hersov, the CEO of one of the most successful international start-ups, England's Sportal, advised the same audience, "Local content with a local perspective makes a difference."

Invest For Success

The distinct challenges of international e-business have drawn talent from around the world to specialized consulting and service businesses that can provide the expertise needed to introduce a promising Internet business to new international markets. San Diegan Steve Simpson, a technical director at Proxicom, relocated to Munich, Germany to support international business programs. Most of Proxicom's U.S. clients are now conducting business in several countries, using sites built with Java script which enable users to switch language with just one click. Simpson finds the key to success in international markets starts at home, reporting that "It helps a lot if you've got a good business plan and know what functionality you want." Cost control is another good reason to plan ahead — most international Internet consultants bill out at $150 to $200 per hour.

Steven Kass, a consultant at International media agency idPraxis in Berlin, coaches clients to prepare for subtle differences in consumer tastes in different international markets. The former San Diego State University student has observed a range of fine distinctions between successful Web sites in the same categories in different countries. Kass finds that "the main issue is cultural differences. This often means a different focus and a different design. Even color tones can be different from country to country." A comprehensive customization of an e-commerce site for international business by idPraxis or similar agencies costs about $50,000, and takes one to three months, including professional translation and adaptation of existing Web pages.

The Internet itself is making international business expertise more accessible. Smarterwork.com Ltd. of London staffs international Web site design and creative services projects with virtual teams of consultants around the globe. In addition to consultants who provide specialized expertise, an increasing number of vendors offer turnkey solutions and packaged programs to support international e-business. Globalfulfillment.com of Los Angeles offers a scalable set of back office services for international online businesses, offering one-to-one marketing, shipping, transaction processing, order tracking and customer service on a pay per use basis. Platox AG of Berlin has developed packaged software for international e-commerce sites which incorporates many of the features helpful in customizing Web pages for individual foreign markets.

Technology has made international customization and translation faster, but there is no substitute for old-fashioned quality control. Estee Lauder Vice President Jeanne Wagner cites the example of Swedish consumer electronics manufacturer Electrolux, which targeted American consumers with a direct translation of its successful scandinavian advertising campaign, "Nothing Sucks Like an Electrolux." Another start-up, Clicksure of Los Angeles, is focusing on such quality control challenges by offering site audit and ISO quality control certification for e-commerce.

New Ways That Pay

Many fundamentals of international e-business are simple extensions of best practices at home, but payment procedures are an entirely different matter. Dozens of businesses have launched services to bridge the gap with affordable terms.

Planet Payment of New York enables e-commerce sites to accept credit card payments in 150 currencies. This service saves end customers the fees and unpredictability of making payments in U.S. dollars at the same time it supports competitive pricing and comparisons with local competitors. "Planet Payment clients need only one credit card and merchant account, instead of one in each country whose currency they accept," explains company representative Jeff Birnberg of Lake Arrowhead. The Planet Payment global service requires a set-up fee of several hundred dollars plus transaction fees of about four percent.

Credit card payments are a favorite with e-commerce site operators, but are not so popular with consumers outside the United States, who are frequently concerned about security and high fees. A study released at Internet World in Berlin showed that 90 percent of European customers prefer direct bill and direct payment systems. Start-up iClear of Cologne, Germany, has responded to this need by offering an escrow service with the direct payment service consumers want, at the same time that participating merchants in other countries are guaranteed full payment for the products they ship. Information, entertainment and services can be more complex to bill across borders in real time. Net900 of Krefeld, Germany is now featuring a solution that bills online services such as games and short translations to Internet users' telephone bills by treating online orders as special service toll calls.

Internet businesses that rely on commissions face a different set of payment issues when they go global, from tracking commissions due to managing accounts payable in a myriad of currencies. Santa Barbara based Commission Junction collects and pays commissions on all sales worldwide for its affiliated merchants. It recently opened international offices in Hong Kong and Amsterdam to support the growing volume of international transactions. Zanox AG of Berlin is introducing an international commission payment program which pays for all business generated by a new customer referral, not just the first sale, by assigning a unique ID to each referral.

The many complexities of international e-business can make working with a local partner a worthwhile alternative. Several incubators and portals are capitalizing on opportunities to open doors to new markets for a share of revenues or profits requiring no up-front investment. Portal AG of New York and Cologne, Germany has set up a dozen business-to-business portals with local customization and offers existing Web sites visibility in local markets for a percentage of revenues with no fees. In Europe, incubators are taking a somewhat different approach from the United States and offering local customization programs for foreign Web sites in exchange for a small share of equity ranging from 2 percent to 5 percent. This approach also can be the fastest, leveraging the existing infrastructure of the incubator in the foreign market. Bernd Schnell, a consultant at the Venture Lab incubator in Frankfurt, Germany, closed two new international deals in two days at the latest Internet World show.

The array of choices available in global e-business can translate into a very long to-do list for the management team that decides to go global. For many Internet businesses, the to-do list is becoming a must-do list. As Jorden Woods, CEO of Global Sight Corporation in San Jose, told hundreds of e-business executives at the Global Internet Summit, "If you’re building a site that’s just for a single-country market, that has a very limited opportunity. Not thinking globally from the start is the biggest problem you can have." In Internet time, now is the time to go global.